OBAMACARE
FATE RESTS WITH ‘YOUNG INVINCIBLES’

Tending bar three days a week, with student loans still on the books, Promise Monroe of San Diego finds health insurance has not been possible financially. Even after checking prices on the state’s new health insurance exchange, she said, nothing changed.

Though government subsidies would reduce her monthly premium for a “silver” exchange plan from $246 to $150 a month, it will still be cheaper for her to pay the government’s fine, 1 percent of her income.

Though she said she generally supports Obamacare’s goal of affordable care for all, Monroe said she’ll keep going to local clinics for care when she needs it.

“I don’t like sitting in a clinic. I would rather go to a doctor’s office, but that’s a luxury I can’t afford at this point,” Monroe said.

That attitude drives to the very heart of federal health reform, many economists say.

At age 31 with no children or pressing health needs, Monroe is part of a demographic labeled in the insurance industry as “young invincibles.” These healthy adults in their 20s and early 30s are seen as key to the success of Obamacare, which requires most Americans to have health insurance, or pay a penalty, starting Jan. 1.

The logic is that the economics of health insurance requires plenty of premium-paying healthy people to help cover the costs of the sick, said Joshua Graff Zivin, a professor of health economics at UC San Diego. An insurance plan full of sick people is a recipe for price inflation, he said.

“You cannot sustain low prices without a diverse risk pool. The evidence on that is unimpeachable,” Zivin said.

Health reform adds a new wrinkle to the complex health insurance marketplace. Starting on New Year’s Day, health insurance companies will no longer be able to deny coverage to Americans with pre-existing conditions. That only increases the need for healthy people to pay premiums to help cover the costs of those with chronic medical needs, Zivin said.

“You need to have the people with the pre-existing conditions in a mix with a bunch of other kinds of folks to make the system work,” Zivin said.

It is unclear exactly what effect the pre-existing condition change will have on the price of health insurance. Karen Politz, a senior fellow with the Kaiser Family Foundation, noted that insurance companies have been accepting pre-existing conditions in the large-group policies they sell to businesses for years.

“We’re not seeing a death spiral in the employer plans, which are pretty stable,” she said.

While guaranteeing coverage to all is seen as driving up the price of health coverage across the board, another Affordable Care Act change directly affects young people.

Starting at the first of the year, insurance companies may not charge older Americans more than three times more than they charge their youngest customers. Because the older demographic has more medical needs, this provision tends to mean higher premiums for the younger end of the spectrum, many experts say.

Since launching Oct. 1, new health exchange websites have also taken criticism for being slow and buggy, causing concern that glitches could turn off health reform’s youngest, and most tech savvy, potential customers.